Importance of getting online during the downturn

Hard-pressed consumers will turn to the web for information to compare products in order to make the best use of every rand. Businesses will leverage the web to develop new products and cut their costs.

Africa is only at the beginning of the transition to the digital age. About 42% of Europe's total population enjoys broadband connections and some 150 million of the 491 million European Union citizens shop over the Internet. In contrast, just under 10% of 44 million South Africans benefit from broadband.

Moving fast

Yet Africa is moving fast into the digital age. Across the continent, a new generation of mobile phones is enabling more people to access the Internet. According to Informa Telecoms, the number of mobile subscribers in Africa increased between 2002 and 2007 from 36 million to 280 million. The projection for 2009 is a phenomenal 450 million subscribers. Already, teenagers in SA cities and around the world spend more time interacting with friends via social networking sites than in front of the TV.

SA itself just reported its highest rate of internet growth since 2001, up 12.5% to 4.5 million, according to the Access in South Africa study conducted by World Wide Worx. Most of this growth came in broadband. Better yet, the high pickup is expected to continue for the next five years, taking the Internet user population to the nine million mark.

Better telecom networks and fierce competition is fuelling this impressive growth. The new SEACOM undersea cable is set to go into service by the end of July this year, with the potential to increase SA's bandwidth thirty-fold. At the same time, the government has granted telecommunications licenses to many new service providers. This is bringing down the cost of access for both consumers and business.

For consumers who have less money to spend on leisure, and with an increasing wealth of entertainment and content found online, staying at home is the new "going out". Having more time and less money means that families are more determined than ever to spend wisely. With the cost of Internet access set to fall and its speed accelerating, the web is becoming an increasingly powerful tool for consumers.

Comes into its own

Businesses, not just consumers, are desperately trying to ensure they get value for money in these cash-tight times. And it is here that the Internet comes into its own, enabling companies to market themselves to their potential customers in a way that is flexible, targeted and cost-effective. To put it bluntly, it allows firms to get more bang for their bucks - which is more important than ever when every cent counts.

Many small companies have previously only been able to afford to advertise in the Yellow Pages or other directories, if at all. But now they have a new, inexpensive and effective option. It is no wonder that the Internet, which took less than 9% of total global ad spending last year, is forecast to grab almost 13.6% by 2010, according to Zenith Optimedia.

These days, more and more SA organisations, both large and small, are integrating online advertising within their marketing strategy. What's striking in SA is the impact of the rapid uptake of small and medium enterprises migrating from slow dial-up to faster ADSL lines. For each small business that adopts a broadband internet connection, 20 additional individuals end up connected to the net, according to the World Wide Worx report.

Critical information and opportunities

Additional bandwidth will help provide critical information and opportunities for economic growth to African citizens, as well as tourists and visitors ahead of the 2010 FIFA World Cup. Google's presence in SA reflects our commitment to improving access to information and helping businesses make the most of the online space. We aim to spur the growth of online advertising, helping to ensure that SA consumers get the most out of their rands as they harness the power of the Internet to stay abreast of trends, to compare offerings and prices, and to make informed purchasing decisions.

All of us are now in uncharted territory. There has not been such a long and serious economic downturn since the Internet took such a major role in our world. It is now clear that businesses that don't respond to changing consumer behaviour - and to new opportunities - risk falling behind their competitors. Those that do invest in building and expanding their online presence will undoubtedly get ahead.